Credit ratings and 'well-intended' banking reforms mean older Australians can be easily denied credit cards

Jacqui Bauer says she had to “beg” her bank for a credit card.  (ABC Radio Brisbane: Kenji Sato)

When Jacqui Bauer applied for a credit card she discovered she had no credit rating and was therefore deemed “high risk” by the banks, despite earning a stable income.

Until that point, Ms Bauer had a joint bank account with her former husband, meaning she had no credit history in her own name.

“When I wanted to get a credit card in my own name I had to beg and grovel to get one, and they would only give me one with a $500 per month limit,” Ms Bauer said.

“A lot of people don’t realise if you don’t have the credit card in your own name you are not getting a credit rating, and you need that credit rating to move on with life.”

Older people locked out of credit

The 57-year-old cleaner said that without a credit card she was unable to hire a car, or pay for book packs at her children’s school.

Older Australians are being routinely refused credit cards according to Chris Grice, chief executive of the non-for-profit advocacy group National Seniors.

Mr Grice said it was the unintended consequence of the 2018 royal commission into banking and financial misconduct which uncovered widespread predatory lending practices.

The seniors’ advocate said the well-intentioned reforms which followed made it difficult for older Australians to prove creditworthiness.

“It’s a bit of a whack-a-mole situation and they fix a problem here, but suddenly it pops up somewhere else,” Mr Grice said.

“This tightening of credit policy has meant that a number of folks now find it difficult to get a credit card, particularly in that post-retirement phase.”

Mr Grice said it was more difficult for retirees to prove stable income, particularly those with limited credit history.

Additionally, he said more businesses were phasing out cash and cheques, the latter of which is due to be totally phased out by 2030.

Mr Grice said around 500,000 personal cheques were currently processed in Australia per month, about 400,000 of which were written by older Australians.

And the closure of banks was making it increasingly difficult for customers to access cash.

On Tuesday, a Senate inquiry into the closure of banks in rural and regional Australia held its final hearing at Bribie Island in south-east Queensland, which recently lost its only NAB branch.

“The system, if you want to call it that, is pushing people towards digital payments,” Mr Grice said.

“But there’s cohorts within society, the most vulnerable and the older, that don’t have the capacity to keep pace with what’s happening.”

The Australian Banking Association has been contacted for comment.